Delivered before the Technology Club of Philadelphia, Philadelphia, May 15, 1945

Vital Speeches of the Day, Vol. XI, pp. 507-508.

THE toastmaster has called upon me to discuss "postwar plans for transportation by sea." This is indeed a formidable assignment and one which cannot be undertaken with confidence by anyone other than a prophet—and I certainly am no prophet. It may not be amiss, however, for me to point out some of the features which I feel should be included in any adequate post-war plans for the shipbuilding and shipping industries or rather that portion of them which is concerned with ocean-going ships of naval or merchant types. The ship-repair business, though highly important, is beyond the scope of this discussion.

First of all it is well to have in mind that both industries have undergone complete transformations during the last five years. The shipbuilding industry has expanded from less than 100,000 employees in the late 1930s to over 1,500,000 employees in recent times. During this period of expansion the industry has built the greatest Navy which the world has ever seen. Most of the ships of this Navy will be in existence and still will be of modern type at the end of the war. At the same time, the industry has built the largest merchant marine which any country has ever possessed. At the end of the war our merchant marine will be perhaps five times as large as it was when the war started. It seems clear then that the shipbuilding industry will be faced at the end of the war with a situation in which the supply of ships, both naval and merchant, will be far in excess of requirements. In the absence of an adequate post-war plan supported by the power, money, and prestige of the Federal Government, the industry may be expected to sink to a dangerously low ebb after the war ends. Having in mind this general picture of the probable future situation, we might consider some of the more important developments an shipbuilding which have taken place during recent years.

Those responsible for the planning and execution of our emergency shipbuilding program both naval and merchant, decided very wisely, I think, to rely heavily upon existing shipyard organizations. Each of the larger and more important of these was required to expand its activities locally, that is in its own yard, through additions to the shipbuilding facilities and through expansion of personnel. Moreover, wherever practicable, arrangements were made for experienced shipbuilding companies to supervise the development of new companies in order to give the latter the benefit of seasoned leadership, particularly during the early years of their existence. The magnitude of the program was so great, however, that it was necessary in many cases for both the Navy and the Maritime Commission to rely on entirely new shipbuilding companies without the support and advice of more experienced concerns. Most of the major shortcomings and failures occurred among these new companies which lacked the advice and support of experienced shipbuilders. Moreover, the great successes in the program were achieved almost entirely by either the experienced yards or their subsidiaries—the most prominent exception is the Kaiser organization. Thus, experience in this war indicates that "know how" is an extremely important factor in the rapid execution of an emergency shipbuilding program of great magnitude.

The experiences of this war have taught us another important lesson and that is that efficiency and economy in large scale shipbuilding activities are associated, 1st, with specialization in the type of ship built by any yard, and, 2nd, with the repetitive building of large numbers of ships of a fixed design all constructed in a given yard. A third lesson is that economy and efficiency in shipbuilding can be obtained more readily in a large yard utilizing its facilities at top capacity through at least two shifts daily. More examples to illustrate these lessons could be pointed out.

It may be concluded that the building of ships after the war can be done more cheaply by the use of only a few large shipyards, perhaps only two or three on naval work and a like number on merchant work. There are, however, considerations other than economy. The principal objective should be to safeguard the interests of national defense. Twice within a generation this country has been plungedinto a global war and in each case has been faced with the necessity of great and rapid expansion of its shipbuilding industry. Fortunately, in both wars there was sufficient time for the country to accomplish the task. In the future, we may not be so fortunate. Hence, it is in the interest of national defense to include in our post-war plans for the shipbuilding industry arrangements for the rapid expansion of that industry and its expert management in any future emergency. This task would be much easier were the country, in times of peace, in possession of a shipbuilding industry consisting of not less than a dozen shipyards of large and medium size, half of which were engaged primarily on naval construction, and the other half on merchant ship construction. Under this plan, we should have at least 12 competent managements in these yards capable in times of emergency of taking care of any expanded shipbuilding program which might face the country. Further flexibility and capacity for rapid expansion in emergencies would be furnished by the ship repair yards with their experienced and resourceful personnel.

Another important objective of our post-war planners should be to insure that the quality of our merchant and naval ships will be improved, both steadily and rapidly. This aim can be achieved only through constant emphasis on design and research, and through dynamic and imaginative leadership in the engineering staff of our shipyards and designing agencies.

The concentration of shipbuilding in a few large yards will be likely to result in undue emphasis on production and standardization rather than progressive evolution of design. Better overall results at somewhat higher cost will be obtainable by spreading the shipbuilding load among a relatively large number of yards, each operating in competition with the others in respect to both economy and quality.

No matter what plan be adopted, however, it is clear that the maintenance of a healthy shipbuilding industry will require continued and steady construction of naval and merchant ships in privately operated shipyards. If I were asked to make a guess, I should say that the industry could be kept in a satisfactory condition through the yearly construction in privately operated yards of about 750,000 dead weight tons of merchant ships and the equivalent of perhaps eight or ten light cruisers. Whether the country will be willing to spend the money for such a program as insurance for the unforeseen future remains to be seen, but in the opinion of the speaker the interests of national defense as well as foreign trade require that the expenditures be made.

In respect to the shipping industry, I make no pretense to be an expert but I do know this—that the position of the country as far as its national defense and foreign trade are concerned will be infinitely better with a large and healthy merchant marine than with a small and impoverished one. It has been suggested by competent authorities that our post-war merchant marine should carry about 50% of our foreign trade and should consist of from 15 to 20 million dead weight tons of merchant ships. If the former figure were the one used by our post-war planners, we should have a merchant marine considerably larger than the one in existence before the war. If this enlarged merchant marine were kept in a modern condition through regular replacements on a 20-year life basis, our shipyards would build yearly after the war some 750,000 dead weight tons of merchant shipping. In my opinion, such a program would be sufficient to maintain a shipbuilding industry of suitable size, that is, of course, if it were supplemented by a naval program such as I have suggested. I have only one more thought to add on the subject of the post-war shipping situation and that is that since its inception our Maritime Commission has enjoyed leadership of outstanding ability. I am confident that the recommendations of the Commission in regard to post-war plans for shipping will be worthy of the full attention of the Congress.